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Paccar Reports Record Annual Revenue and Net Income

Paccar Inc., the parent company of U.S. truck makers Kenworth Truck Co. and Peterbilt Motors Co. and DAF Trucks in Europe, said it achieved record annual revenues of $19.12 billion and record net income of $1.60 billion, an 8.4% after-tax return on revenues, for 2015.

Earnings per diluted share rose to $4.51 per diluted share in 2015, up 18% from $3.82 in 2014.

Fourth-quarter 2015 net sales and financial service revenues were $4.36 billion compared to $5.12 billion for the same period in 2014, the company said.

Paccar earned $347.2 million, or 98 cents per diluted share for the fourth quarter of 2015 compared with $394.3 million, or $1.11 per diluted share in the fourth quarter of 2014, which reflects lower truck deliveries in North America, partially offset by increased deliveries in Europe, the company said.

Nonetheless, Gary Moore, Paccar's executive vice president, said in a statement, “Class 8 retail sales in the U.S. and Canada were a robust 278,000 units in 2015, compared with the 250,000 vehicles sold in 2014.”

“Truck demand is being driven by good economic growth, strong freight tonnage and lower fuel prices,” he said. “In 2015, Paccar achieved a Class 8 retail market share in the U.S. and Canada of 27.4% as customers benefited from Kenworth and Peterbilt vehicles’ excellent fuel efficiency and outstanding performance.”

He said estimates for U.S. and Canada Class 8 retail sales in 2016 “are for another good year ... with sales in the range of 230,000-260,000 units,” responding to ongoing economic growth.

Jamie Cook, an analyst with Credit Suisse, said in an investor note that Paccar sees growth in the vocational market “reflecting a healthy residential and nonresidential construction markets. Additionally, relative to a lot of doom and gloom statistics with regards to the broader U.S. truck market, Paccar noted its dealer inventory days are approximately 45-50 days versus the industry, which is at 90 days. Paccar used-truck pricing is holding, reflecting its premium in the market, and the company has not seen elevated cancellations again unlike broader industry statistics. Furthermore, Paccar has been successful gaining market share in the European truck market, which is still growing modestly.”